The owner of Zab Thai in Everett allegedly withheld thousands of dollars in sales taxes. (Zachariah Bryan / The Herald)

The owner of Zab Thai in Everett allegedly withheld thousands of dollars in sales taxes. (Zachariah Bryan / The Herald)

Thai restaurant allegedly dodged sales taxes for years

Charging papers accuse the owner of Zab Thai of keeping thousands of dollars in sales taxes.

EVERETT — The owner of a Thai restaurant in Everett has been charged with first-degree theft after allegedly keeping thousands of dollars in sales taxes.

Charging papers accuse the owner of Zab Thai, operating in south Everett since 2007, of using sales suppression software to underreport the money her restaurant was making.

The technology has made headlines in recent years. Washington state Attorney General Bob Ferguson pursued a similar case last year, involving a chain of Mexican restaurants and reportedly a lot more money, but he eventually dropped those charges.

An audit of Zab Thai between 2012 and 2015 showed a history of financial tampering, prosecutors allege. One year the restaurant apparently made more than double what was reported.

Auditors with the state Department of Revenue made a series of unnannounced purchases. But when they later reviewed transaction records from the restaurant’s point-of-sale system, several of those purchases apparently had disappeared.

The auditors believed the owner was using software to hide sales transactions recorded in the system.

Even then, the database showed an extra $80,000 that was never reported for sales tax purposes, charging papers say.

The restaurant allegedly also gave customers a higher tax rate than normal: about 9.5, instead of the 9.2 percent that’s due in Everett. The owner kept the change, prosecutors claim.

In 2012, the defendant allegedly told the state Department of Revenue that the business made $298,000. Federal tax forms, however, showed sales reaching more than $640,000. The total revenue may have been even higher, investigators wrote.

After taking out estimated tips, investigators concluded that the restaurant kept at least $25,000 in sales taxes in 2012.

Charging papers did not detail the findings from other years.

Two owners are listed on the business license for Zab 99, LLC, but the defendant said she was the only one to use the sales supression software, according to prosecutors. The other owner is in Thailand.

The defendant operates two other restaurants in the Seattle area: Bangbar Thai in West Seattle and Chaiyo Thai Cuisine in Northgate.

Zachariah Bryan: 425-339-3431; zbryan@heraldnet.com. Twitter: @zachariahtb.

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